Automotive electrification comes at a jobs cost, says GlobalData

Audi plans for the cuts to take place along the demographic curve by natural attrition and incentivized early retirement, but compulsory redundancies are usually inevitable when such large culls of a workforce occur.

“Audi has announced a EUR300m spend to retool its Ingolstadt and Neckarlsum factories to produce EVs, which is good news. However, it has also announced the loss of up to 9,500 jobs by 2025 as part of its Audi.Zukunft plan, which claims that remaining posts will be guaranteed until 2029.

“Audi plans for the cuts to take place along the demographic curve by natural attrition and incentivized early retirement, but compulsory redundancies are usually inevitable when such large culls of a workforce occur.

“The company has attempted to sweeten the deal agreed with its powerful works council by saying management will also be cut by an equivalent percentage and that it will recruit around 2,000 digital and mobility experts with priority given to internal over external candidates.

“Automakers face massive EV development and tooling costs as they work to comply with strict new fleet-wide CO2 emissions targets. There are currently five million EVs on the world’s roads, which is up two million from 2018. This massive rise is supported by that EVs are relatively simple to build and require fewer assembly line workers. The cuts made at Audi won’t be the last, industry-wide, as more and more companies join the trend.”

“Rival BMW has just announced a deal with its workforce to reduce profit-related and other bonuses paid at times such as at Christmas. BMW wants €12bn in cost savings by 2022.

“Suppliers are also making changes. Continental recently said it would adjust its manufacturing footprint as it changes from making parts for combustion engine vehicles and moves to e-mobility components. About 5,000 jobs are affected over the next ten years. A big industrial and economic adjustment is ahead.”